OEM_Team-1_MountainMan - Mountain Man Brewing Company Team...

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Mountain Man Brewing
Mountain Man Brewing
Company
Company
Team 1:
Team 1:
Rusty McLaughlin
Rusty McLaughlin
Larry Miller
Larry Miller
Corrie Musgrave Corrie Musgrave
Luke Setzer
Luke Setzer

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Analysis of the Introduction of a
Analysis of the Introduction of a
Light Beer to the Mountain Man
Light Beer to the Mountain Man
Brewing Company (MMBC)
Brewing Company (MMBC)

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Current Beer Market
East Central Region % Total 6-year CAGR
Light Beer 18,744,303 50.4% 4.00%
Premium Beer 7,326,642 19.7% -4.00%
Popular 4,351,356 11.7% -5.00%
Imported Premium 4,462,929 12.0% 6.00%
Superpremium (craft
and high-end
domestics)
2,305,847 6.2% 9.00%
Total Barrels 37,191,077 100.0%

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Beer Preferences by Key
Demographics
Domestic Light Beer Domestic Premium Beer Mountain Man Lager
Gender
Male 58% 68% 81%
Female 42% 32% 19%
Age
21-24 9% 8% 2%
25-34 20% 20% 15%
35-44 24% 23% 19%
45-54 22% 23% 32%
55-64 14% 14% 19%
65+ 12% 12% 13%

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Option 1: Do Not Introduce Light
Beer
•
Financial Impacts:
–
No addition to cost structure
–
2% decrease in sales annually
NPV Calculation in Perpetuity (Based on Formula from Finance for an Annuity)
Annual Change in MM Beer Revenues -2.0%
Discount Rate 12.00%
Discount Factor at Year 2010 1.76
Terminal Value (TV) of Contribution from Original MMBC year 2010 on 98,938,470
NPV of Terminal Value of Contribution from Original MMBC year 2010 on 56,140,345
NPV of MM Brewing Company Overall 109,454,800

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Option 1: Do Not Introduce Light
Beer
•
Strategies to Improve MM Lager Sales
–
Target Younger Generation
–
Target Women
–
Expand Sales Region
–
Sales Promotions
–
Increase Advertising
–
Update/Refresh current label
–
Social Marketing

Option 1: Do Not Introduce Light
Beer
•
Strengths
–
Low perceived risk of cannibalization
–
Minimal up front capital expenditure
–
Maintain margin contribution
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Weaknesses
–
Minimal improvement in future financial position
–
Increasing competition for shrinking premium beer
market
–
No data to compare cost to benefit of strategies used
to improve MM Lager sales

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Option 2: Introduce Light Beer
•